AfCFTA Update November 2024
This is part of a series of Global Markets reports on the African Continental Free Trade Area
Guided Trade Initiative Expands to Key Markets
In 2022, the African Continental Free Trade Area (AfCFTA) Secretariat launched the Guided Trade Initiative (GTI) to initiate commercially meaningful trade under the AfCFTA. It applies to: 1) products for which there are agreed rules of origin; and 2) AfCFTA State Parties that have finalized and published their tariff schedules according to the requirements of the AfCFTA as well as enabled their customs systems to receive goods under the agreement.
The GTI encourages the private sector to start trading and highlights when new countries become eligible. Initial shipments of select products took place among the countries of Rwanda, Cameroon, Egypt, Ghana, Kenya, Mauritius, and Tanzania in 2022. The initiative gradually expanded to many more countries.
Major African markets such as South Africa and Nigeria joined in the first half of 2024. By the end of October 2024, 37 different State Parties to the AfCFTA (among the 54 total) will have completed these procedures. This significant threshold of countries and coverage of major African markets creates the conditions for accelerated trading to begin. Growers, manufacturers and processors (including U.S. ones operating on the Continent) that meet the product-specific rules of origin under the AfCFTA can benefit from reduced tariffs in intra-African trade.
Phase II and Phase III Protocols:
The publication of legally scrubbed texts for the AfCFTA Phase II and Phase III protocols (investment, digital, competition, intellectual property rights, and women and youth) provides African traders and other business operators on the Continent critical insights into key areas of regulation and policy.
The digital protocol, for example, recognizes that a harmonized framework is essential for Africa’s own digitalization. It seeks to create a transparent, secure, and trusted digital trade ecosystem on the Continent. It creates transparency obligations to publish all digital-related regulations. It covers important areas such as data governance, data protection, cross-border data flows, online consumer protection, cybersecurity and emerging technologies (including artificial intelligence). It addresses digital payments and interoperability as well as the treatment of fintechs.
Several of the protocols are still subject to negotiations on detailed annexes. Once those are concluded, AfCFTA Parties’ legislatures will need to approve them. They would enter into force 30 days after the 22nd AfCFTA Party deposits its instrument of ratification. There is generally a five-year transition period after entry into force for AfCFTA Parties to make any necessary adjustments to their national laws, rules, and regulations to bring them into compliance with the obligations of these new protocols.
See: https://www.tralac.org/resources/by-region/cfta.html#legal-texts for the texts.
For more information about Africa’s regional integration and to formulate your strategy for doing business in this context, contact: U.S. Commercial Service Ghana at Office.Accra@trade.gov, Tel: +233-(0)30-274-1870. See our further reporting on the AfCFTA.